Integrated EAM for Hotels: An Overview

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According to a recent NYT article, the hotel industry saw record revenue last year reaching $138 billion, growing $28 billion from the previous year. In response, hotels increased rates and major chains like Hyatt and Marriott began planning new hotels. While the recent subprime crisis, low US dollar, and high gas prices have caused these chains to scale back new developments, they have not trimmed them down by much. Over 6,000 new hotels have been built, with a third of those still under construction.

While hotels have been seeing record profits (until recently), those profits have been hard earned. Guests, especially those in the thirty-something bracket, are becoming more difficult to market to. Before they swear loyalty to a brand, they want the brand to be loyal to them. Not only do they expect  loyalty points for frequent visits, they want new and innovative amenities that go beyond hair dryers in each room. In addition to in-room entertainment, Wi-Fi, and airline check-in kiosks, they want knowledgeable concierge services, deluxe spas, intimate bistros, and large restaurants. Because hotels essentially sell their physical assets to travelers (in addition to services), bookings hinge on the condition and cleanliness of the hotel and the amenities offered. Guests do not want to visit a hotel spa and find depressing, worn robes (as found at one Montreal hotel a few years back. They’ve since renovated, but I haven’t been back—and yes, it was because of the robes. If the robes aren’t fresh, can I be sure the nail file is?)

To further complicate things, this cohort is also focused on sustainability issues and wants to know what hoteliers are doing to reduce their carbon footprint as they provide these luxuries.  Moreover, thirty-somethings are by-passing the hotel reservation desk and travel agents when booking their vacations, instead many use online sites like, Travelocity, and that offer package deals with airlines, car rental agencies, theatres, and restaurants.

Give all of this, hoteliers, especially large international chains, are facing complex and time consuming asset management issues. According to an industry survey by the Hospitality Sales and Marketing Association International (HSMAI), revenue management (RM) managers and directors are spending a more time updating channels with rate and inventory information than on strategy and customer engagement. This is why an integrated enterprise asset management system (EAM) system is vital in the hotel industry.

An EAM monitors the entire life cycle of an organization’s physical assets enabling investment planning, specification, design, operations, maintenance, and disposal. EAM incorporates real-time tracking tools, centralizes documents, and decommissions assets at the end of the life cycle. Because hotels now offer a multitude of amenities and services, EAM for hotels needs to integrate with a large number of third party hospitality systems. These include telephone services and call accounting; pay tv; door locks; vending machines; credit card systems; kiosks; food and beverage point of sales; spa management; health club management; etc.

An EAM enables management to care for a hotel's physical assets. For example, the work order management module in an EAM system can issue a work order; indicate the location and reservation it affects; and rank it. The work order can then be sent out via a private network to a PDA, or a cell phone to the appropriate personnel. If the work order module is integrated into a private network, then the maintenance worker who handled the work order can use her PDA to either close it or escalate if the work order requires more attention .

Reservations may be one of the more complex areas of an EAM system because of the disparate online reservation systems that need to be connected to the central reservation and booking database. Hundreds of thousands of global travel agents are connected to a hotel’s central reservation database via a global distribution systems (GDS), such as Amadeus, Sabre Holdings, Galileo, and Worldspan (the latter two operate under TravelPort, but have both retained their brand names). In addition to calculating travel agent commissions, administrators need to manage travel agents’ logins, passwords, and profiles, as well as their permissions. Increasingly, large hotel chains are also making business to business bookings available. All of these involve different pricing structures that need to be relayed to the GDS in addition to up to date inventory information on room availability. To keep up with online third party reservation sites, hotels also need channel management software such as RateTiger or Pelican's EZ-Distribution System.

The reporting features of an EAM can enable hoteliers to optimally price rooms and create packages based on season, day of the week, and cliental by using what-if analyses, forecasts, yield management and other reports. Workforce management tools with scheduling features can ensure that housekeeping and maintenance are available during peak hours. Preventative maintenance and inspection and risk assessments, contract management, as well as government reporting, and health and safety, are also features in an EAM system.

I’ve only flagged a couple of areas of an EAM system here. If you’re in the hotel industry, tell me about your hotel management software, and especially about areas that EAM either hits or misses.

To learn more, visit TEC’s EAM Center.
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